CapitaMall Trust: Announced 1Q12 results which were in-line with expectations. NPI at 108.3m, +2.5% YoY, while distributable income at 76.6m, +4.6% YoY, although DPU was effectively flat at 2.3c, translating to an annualized yield of 5.04%.
Operations saw shopper traffic declined marginally by 1.9%, although tenant sales actually rose 3.9%. Occupancy rates remained strong at >99% for the malls that are not undergoing asset enhancements.
Looking ahead mgt note that asset enhancement works at Iluma are on track to complete by July 2012, and the mall will be rebranded as Bugis+ to better represent its synergy with Bugis Junction. Over 80% of the NLA has already been committed, with Japanese fast-fashion retailer UNIQLO set to open its largest duplex store at close to 20,000 sq ft.
We note that overall fundamentals remain strong, with a leverage ratio of 38.3% vs retail reit average of 25.8% and an interest coverage of 3.4x and average term to maturity of 3 yrs. At current price, grp trades at 0.92x P/B and an annualized yield of 5.04% vs Retail reit average of 0.8x P/B and 6.6% yield.